Ministers are under pressure from some of Britain’s largest retailers to bring an immediate end to a customs tax loophole that benefits Singapore-based online fashion group Shein.
The concession allows Shein, most of whose products are made in China, to post parcels direct to UK shoppers without paying duty.
Retailers including High Street stalwart Primark, are exasperated by Labour kowtowing to Shein.
The Government is desperate for Shein to list in London to show the City is open to business under Labour.
But Ministers face a backlash from British retailers, who face big issues because of Chancellor Rachel Reeves’ Budget, which raised employers’ National Insurance Contributions and made it largely uneconomic to employ part-time workers.
They are angry that the nation’s High Streets are littered with empty stores, yet the Government is laying out the red carpet to a Shein flotation.
Losing its shine: The online shop’s China-made garments are not liable for duty when imported into the UK
The latest expectation, after many delays, is that Shein will list its shares before Easter.
It is understood that Treasury Secretary James Murray has admitted Britain is largely out of line with its G7 rivals on customs duty.
Among Donald Trump’s first tariff actions against China was to order the US Postal Service to stop accepting parcels, worth less than $800 (£650) from entering the country duty-free.
Trump’s executive order was temporarily reversed as the US Postal Service sought to agree an efficient collection mechanism for the additional duties with US Customs and Border Protection.
Britain has been reluctant to follow the example of the US and Europe for fear it may jeopardise the Shein float. The likely valuation has already shrunk to £40 billion from estimates of £60 billion.
British retailers regard Shein as unfair competition because of the lack of transparency in its supply chain. Fears remain that Shein’s products are being made in unsupervised conditions with cheap labour in mainland China, undercutting even the cheapest fashion on Britain’s high streets and home-grown websites.
Goods from Shein and Chinese shopping platform Temu enter the UK free of duty if the value of the parcels is less than £135. Above this a 25 per cent duty is imposed.
Among the retailers campaigning against the Shein exemption are Ryman, Robert Dyas, Superdry and even upmarket Gieves & Hawkes. Television entrepreneur Theo Paphitis has described the Shein onslaught as ‘suicide’ for UK industry and retail. Shein was approached for comment.
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